Lump Sum Investing vs Investing Over Time (dollar cost average) | Which is best?

If you've got a lump to invest should you be investing it all straight away or should you phase it in overtime?
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Whether this is your first time investing or you've just received a significant lump sum that you want to invest, it can be a very daunting experience.
But once you've decided what you want to invest in you have two options:
1) Invest everything as a lump sum, all in one go
2) Phase the money into the market over a number of months, benefiting from dollar-cost averaging
The rational answer is simple, the stock market goes up more than it goes down, so therefore you have a better chance of capturing those returns the longer you are invested.
But it's very hard to just accept this as fact, especially when the stock market looks so high.
There is no single right answer, and the best option will depend on your prior investing experience and attitude to risk. But in this video, I will talk you through everything you need to know so that you can make the right decision for you.
Nick Maggiulli’s Blog - ofdollarsanddata.com
DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice - James is not responsible for investment actions taken by viewers. Please seek out a regulated advisor if you require assistance (whilst James is a financial adviser, he does not provide advice through this KZbin Channel, which is not affiliated with his employer).
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Copyright © James Shackell 2021. All rights reserved.
The author asserts their moral right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this channel and any video published on it.

[@JamesShack]

If you received a significant lump sum, let's say more than you'd typically save in an entire year, how would you feel about investing it? Would you invest it all at once or phase it in over time?

[@JamesShack]

@@ChrisJFinance Yes thats a good point Chris, a good return is a good return. A good return is one that helps you to achieve your goals. "Beating the market" is just marketing BS from investment managers who want you to feel bad/guilty of you're not at least trying to beat the market.

[@elliot5504]

The mental strain investing can put on an individual is something not spoken about enough! Great video. Sleepless nights makes earning passively less passive. DCA to avoid trying to time the market!

[@simonwl]

I can fully understand not risking a single lump sum investment. However, if you phase, there's a risk of overcomplicating your portfolio. For example, I invest my first amount in fund A. That fund then drops over the next couple of months. I then decide to put my next amount into another fund that has performed well in that last few months. You see where I'm going here! Before you know it, we have over diversification or overlapping equities. As James said, over the long term, you would expect any well picked portfolio to make money. So stick to your principles and research. It's all about time in the market and not timing the market.

[@nunoanjos8078]

From a perspective of someone who just started investing a few months ago, although I know lump sum would give me better results, I had to go with DCA. The first months I would check my investments almost daily. Now I just check it when I'm going to buy more. It would be very hard to watch it go down these last weeks if I went for lump sum.

[@davidjones4130]

I think I would be somewhere between the two options. Maybe split the lump into 2 or 3 chunks. Half in so I'm invested in. Then the next peice of two if a dip. Cba sliding it in really slow. Paying fees ect .

[@darmstro87]

So true...having recently invested a lump sum then seen the markets go down, it is reassuring to know that in most instances it is generally the better strategy. Having said that, it is more stressful and makes you question yourself more, so I can well understand why you might advise your clients to DCA instead. I am continuing to invest small sums on a monthly basis so can hopefully benefit from both strategies in the long run.

[@nathanhallisey441]

I will have my car loan paid out in a few weeks. I cut up and closed my credit card last week. I have an Emergency fund, and with my budget i have room to build that up. In my job i get lots of overtime. Every month i am going to buy into an ETF with the extra pay.

[@MarcioSouza1]

Closing credit cards hurts your credit score. It's better to keep it open, and use it minimally (and pay it off immediately, if you don't want to pay interest), to keep it open

[@derekdrew7922]

I recently downsized my property and was faced with this very decision on what to do with the cash. Even though I knew from previous literature that lump sum was a better approach than phasing in, I went for phasing in mainly because I wanted to minimise the regret I would feel if the markets went down after investing . As it turns out I've made on some decisions and lost on others. The good news is that I haven't lost a nights sleep! Seeing this video first would have made my decision a lot easier to make. Keep up the great content!

[@simonspencer3108]

Great video. Another advantage of DCA is that it gives you time to learn and for your strategy to evolve as you pick up more data. It is not so “one and done” as lump sum investing…

[@christinanolan2388]

Great advice, thank you! Especially when you think that a lot of the peaks and dips in the price of shares are the result of buyers and sellers emotional response to price fluctuations, committing them to buy and sell when holding is usually the best option.

[@capnron65]

Needed to hear this, thanks!

[@tondenotter8109]

Thank James for this video; I really like your focus on the aspects of behavourial finance rather then focussing on maximum returns!

[@samuelijeh1085]

Thanks James !, as usual very candid, useful and honest advice. It’s always a pleasure to watch your content .

[@JamesShack]

You're welcome Samuel!

[@neilcook1652]

Great rational advice thanks James, love the cool, calm, historical analysis of previous trends....

[@JamesShack]

My pleasure!

[@logosproclamation453]

Excellent points, James! It can emotionally get you if you go all in.

[@JamesShack]

It can indeed!

[@sevensorrows2595]

Great video as always, James, thank you. If I was handed a lump sum to invest, I would probably take a third way and split the money in two equal parts, investing one half straightaway and phasing in the other half in stages, thus benefitting from both scenarios.

[@yueranzhang7840]

This is a really useful video to me as I have been having this question and battling with myself in my mind for some time.... This video really provides me with an answer that i can live with and follow. Great thanks!!!!

[@fionamurphy1562]

Really useful video and well balanced arguments for both options. Thank you

[@JamesShack]

No worries Fiona!

[@tracythompson4024]

Thanks James, was planning to invest a lump sum in the next couple of years and hadn't thought of the emotional/stress aspect - food for thought!!!

[@JamesShack]

Yes it will be tough either way. We often create an "Anchor" around the price we buy in at which makes it hard for us to make rational decisions. For example, if the market had been going up for years but then had a correction (10-15% drop) right after you started investing you may think that it's now a bad investment and you're thinking about selling. But some one else who invested years before you, is sitting there with the exact same holdings but thinks it's a great investment, it's just had a little blip. Who is right? It's all about framing. You can read more about this here: corporatefinanceinstitute.com/resources/knowledge/trading-investing/anchoring-bias/

[@calum6590]

Nice video. After always hearing time in the market not timing the market (& reading various books etc) I made a lump sum investment in early Jan 2020. By mid March i was really beating myself up. From my own experience I will certainly drip feed in the future into final allocation position (to counter lump sum i went higher allocation to bonds than final position but still didn't cope physiologically well in declining market)

[@jeremyh2652]

Very helpful. Thank you

[@ModestMillennial]

Great video and very well explained about dca and lump sum investing.

[@JamesShack]

Thanks!

[@ThatFinanceShow]

Great video James. Lots of data to back up the facts. I have similar conversations with clients myself and judge each one as they come.

[@JamesShack]

Cheers Tom!

[@ryanjames702]

Thanks James, this is very helpful and very well explained. Cheers, keep up the great work 👍 I would be happy investing a lump sum, time in the market is more important than trying to time the market

[@JamesShack]

Thanks Ryan! Yes personally i don't think it's worth the stress, timing the market takes up too much mental energy.

[@FlyingFun.]

Normal circumstances I agree, but now I'm not sure, no one knows if when we might get another big dip. Im very new to investing, just started a couple of months ago using funds, the chatter going on that I'm reading everywhere is generally waiting for a drop and I have 250k in cash to invest from selling my house which is for my pension so I dobt want to see it go down loads or be eaten up by inflation either so I'm going in with 40k for now doing a few k every few days.

[@suedechaneet6149]

Thanks James. This was very helpful to our situation. We DCA with our monthly savings but have received payouts from inheritance or annual bonuses that we had debated the correct strategy. Since finding your channel and hearing you bang on about “if you think the stock market is going to go up for the long term it is time in the market that counts not when you enter” we had started investigating these bonus amounts as lump sums. It was reassuring to hear some more data in this video👍🏼

[@JamesShack]

Hi Sue. No problem! Yes just setup your system and let it run! It will all come good in the end.

[@sanjaymanu1]

Excellent insight...I was about to invest a lump tomorrow ... but was bit nervous. Now , I can do with better understanding and less worries...thanks a ton..!!!

[@JamesShack]

I'm glad it helped! Keep your emotions under lock and key!

[@ModestMillennial]

@Sanjay Kumar: If you are investing for long term it won't matter, just invest and let it grow 🙂

[@NardiPaffon]

How come KZbin never recommended me this channel thus far? Why aren't there a billion vews on this? Keep it up mate, lovely and valuable content

[@JamesShack]

Haha Cheers Omri and welcome!

[@sunnytylee]

Great video! Thanks James! I was one of the ones who asked this question.. 😅 appreciate the insight. Invest lump sum if disciplined enough. At the end of the day, only invest in what you can afford to lose.

[@JamesShack]

Yes exactly!

[@jonnywishbone9516]

The £20k annual ISA allowance and the specific time of year relative to 5th April when you acquire your cash may also significantly influence the DCA vs lump sum investment equation.

[@barnoluk9272]

Not necessarily. You can plough the money into the isa within the tax year and then invest it at a time at your leisure

[@eddiesigerexperience9803]

Good information! I don’t have enough money for a lump sum so I’ll keep averaging in 😅

[@Amit_l92]

Personally I will stick to dollar cost averaging for now as I’m early in my journey yet & feel more comfortable doing that though my opinion may change as time goes on. Great video.

[@JamesShack]

Yes stick with that until you feel comfortable going straight in. There will come a time when the amount you’re investing is so small in comparison with what you’ve already got invested that you really don’t care!

[@ModestMillennial]

@Amit: Do whatever works for you, as long as you are investing you are fine 🙂

[@turningpoint4238]

@@JamesShack Thats true, putting in about au$1000 a week now and it looks like peanuts. Just spreading it in a load of tech growth as an insurance my main plays don't work out.

[@abcde1054]

Great vid!

[@molocouk]

Another great video, thanks. Food for thought for sure. You're totally right about obsessively checking the portfolio for weeks after a lump sum investment and plotting the falls against a bad night's sleep would make an interesting graph!

[@JamesShack]

Haha yes that would! I would love to see some research on how trading apps have affected people's investing patterns and whether it's has a positive or negative affect (I think negative!)

[@DemonWolfEdits]

Thank you, I like the way you've layed this out. I have done a combination of both strategies, I put in 30% of my savings to get things started. I plan on DCA another 40% in over the next 12-18 months.

[@clarenceishmael9615]

I've watched a few vids on this subject as I am currently wrestling with this conundrum, but I think you've convinced me to bite the bullet and throw it all in and set and forget. 🤔 Thanks.

[@FredBerger11.11]

Great data and honest evaluation of investing. 👍🏼 TY new Sub

[@JamesShack]

Cheers and welcome!

[@saras4472]

Great video James! I’d be happy to invest a lump sum

[@JamesShack]

Nice Sara, if you have the discipline that is technically the best way to go .

[@drazziweht]

Interesting to see that you and Pensioncraft, the other youtube financial chanel I follow come to more or less the same conclusion. Lump sum is the 'best' but DCA is less scary for a quite small downside as long as you do it over a reasonable period (< 1 year)

[@rinodb83]

Keep it up, James. Your channel will explode all of the sudden and you will reach a wider audience! Make sure you drive those likes for the yt algorithm

[@JamesShack]

Cheers Rino, let’s hope 🙏🏻

[@Ian61432]

Fantastic info!

[@JamesShack]

Glad it was helpful!

[@anthonycooke3971]

James, your spot. I invested a large lump sum on advice of HL and also DCA by regular investing monthly. Just before Brexit vote. The stress levels were huge. Ended up withdrawing some. Now wishing I hadn't and now going to do DCA. Will watch your other videos. Very informative.

[@JamesShack]

It does happen! Thanks for watching!

[@rustypipe]

James are you planing a video about inflation / risks and where to invest to be protected from inflation. The forecasts for rise in inflation during next months years are scary.

[@patricksharkey7764]

Thanks James- your content is very good and delivery excellent. I think part of the problem is that at present it is so easy to monitor your investment progress that it facilitates regular checking with attendant anxiety. I’m older than most of your subscribers (I suspect) and in the past you received an annual update which made it unlikely you would change a strategy when implemented. For me- look at the data, make the decision and only monitor very occasionally.

[@JamesShack]

YEs this is a big part of it for sure! Gameatised investing apps have encouraged short term thinking and tradings, it's not doing anyone any good, other than the middle men that take the fees!

[@CrappyProducts]

That's the main reason why Vanguard does not have an app. You are not suppose to easily check it

[@Bitachon]

Great info 👍

[@gavinquinlan]

I really enjoy your videos and content. Thank you for your continued efforts.

[@felipearaujo5835]

What about doing both? Six months ago, I opened an investment ISA and and a pension ISA. Paid a lump sum into each of those accounts, and set up a monthly direct debit for each. Would you recommend that strategy? Big fan of your content - clear, concise, and extremely digestible. Keep those videos coming.

[@albertfranchgibert3980]

Thanks so much James, great video, you solved one of my biggest doubts. Just one question, if I look at today's data, Shiller PE is at 32 while Forward PE ratio for the SP500 is 17,5. Very close to the 17 average, suggesting we are in fair value territory, while the Shiller PE is suggesting otherwise. What is the best indicator from your point of view?

[@darrunn]

Very thought provoking video 🤔

[@JamesShack]

🧐

[@samuelmarsh840]

I like this video, and actually seeing this i would have spaced out my initial investments over a few months, instead of the bulk going in straight away...time to build a time machine and do just that 😊

[@JamesShack]

Haha captain hindsight !

[@lninjabigd]

Great video as always and really informative, thanks James ! Whilst lump sum seems probabilistically better I think I would still personally go for the dollar cost averaging, just for peace of mind. But by weighting the monthly investments heavier at the beginning of the DCA, one would get a faster market exposure and have a nice balance between the two approaches !

[@JamesShack]

That is true, each to their own!

[@KaliYug.]

There's plenty of junk on YT, and TBH I thought you'd be another charlatan, but no, your explanations are superb, and I say that as a fellow chartered IFA. Well done sir.

[@JamesShack]

Thank you! That means a lot coming from a fellow professional!

[@peregarcia9296]

Very good content and great timing, considering the market up and downs we have faced during the last two years. Actually it would be really great to take this video and put it perspective to what it has happened during these two years; for those as me that invested a lump sum for the first time it has taken nearly two years to recover whereas DCA would have been a better option, so now after two years of up and downs I wonder whether I should invest my next ISA allowance in full or phase it in during 2024.

[@atul9380]

Another great topic handled well. The key thing to note is we have imperfect information about the market; whether it goes up or down on any given day is a coin toss. If you have a lump sum, just invest it. If it sounds scary, your portfolio might need to include more fixed income assets. DCA works well given we know little about what’s to come and a suboptimal tactic is better than none at all

[@JamesShack]

Yes that's always the consdieration, if you're not comfortable investing straight away and taking the risk then maybe you're portfolio is too risky.

[@eshanpotnis]

Great video! Thanks. How would you compare this against the brokerage that you pay every time you dollar cost average? Eg $1000*5 at $10 each trade is $50 vs $5000 for any trade above $1000 is $20. Speaking from ASX perspective.

[@omax-sy8xp]

Thanks James I really appreciate the research and data you provide in your videos. In all time market highs with p/e ratios the way they are, over how many months do you recommend to dollar cost average? Is it more stretched out than normal or do you maintain the same time frame?

[@JamesShack]

I qwould not vary the number of months based on market conditions, i qwould vary it on the amount of money and the nerves of the investor. More money, the longer, more nervous , the longer.

[@paulb236]

I'm about to invest the proceeds of the sale of a house I was letting. I will put 20k into my ISA and I assume the most tax efficient thing is then to fund my SIPP at 40k / year from a mixture of contributions from my salary and then top ups from the invested lump sum thus getting the capital gains and tax relief benefits of the ISA and SIPP. A video on making best use of the ISA and pension allowance and CGT maybe would be very interesting to me. Thank you again James for your great content.

[@RichardBarleyphoto]

Great video, I have only just started watching your videos but I can tell you have a balanced view, I think that investing in property directly . 5 bed hmo giving monthly net cash flow of £1000 may be a better option for a lump sum investment. I see the stock market as a 30 year investment for disposable income every month using dollar cost averaging to help with the emotional side. Will keep watching

[@JamesShack]

Cheers richard, thanks for the support!

[@simondennis262]

Great videos. I have learnt a lot. So: LS is better on average and DCA / over time less stressful, but what is the probability of LS being better? If I knew the odds rather then the average return, maybe more of us would be less stressed and better off!? This is a situation where most of us are only rolling the dice a few times (which I appreciate is the thing we should be avoiding proactively!) And as cash is bad long term, is LS in to multiple investments before fading back in to fewer preferred ones, preferable??

[@marianelavelasquez9696]

Dear, dear James thank you the most informative video about investing out there Re. Investing a lump sum or small amount. But more than anything else, thank you for dissipating my fears about investing a lump sum and answering my question so clearly and in real depth. I have recently cashed some money out from another investment and I need it to put it back in the market. Thanks to your video I will invest a lump sum now. Perhaps not the entire £20 k but £10 k in Vanguard Lifestrategy 100% and another £5 k in the S&P 100? And the last remaining £5 k in small amounts over few months and then carry on paying in every month. Love you lots for your kind Informacion

[@JamesShack]

Hi Marianela, yes if you had money that was previously invest in the markets it should be re-invested ASAP in the new strategy. The vanguard Life startegy does already have quite a bit of US exposure but you could add to it if you like the US.

[@marianelavelasquez9696]

Oh wow James I adore you for your kind and fast responses. You the only one that talks in such an eloquent and engaging manner and the only one that makes it so clear and direct to the point. Thank you

[@happyuk06]

I guess an important factor of lump sum investing is that the money starts earning dividends NOW, straight away, as opposed to earning nothing if you carry on waiting in the wings with "dead" money.

[@loutol2952]

Great video……food for thought. Personally, any true long term passive investor will simply invest lump sum and forget about timing the market. Nobody knows what is going to happen in the future. The human emotion is a funny one…you are either timing the market or you are not.

[@JamesShack]

I think it gets easier overtime as the amount you’ve already got invest grows to be much much larger than what your investing.

[@Jamiebmurray]

We invested lump sum and then set it all on DR ie DCA. I think the key is that we don't need the money right now which takes the stress off it, I also went with a biblical idea of planting and waiting 3 years before doing anything with it! This has protected us from reacting emotionally to the ups and downs of the past year! Enjoy your instruction James, thanks.

[@jennyskerry344]

*Thanks for your review feel free to contact my personal broker on WhatsApp ...+1° 3° 8° 6° 3° 6° 1° 3° 2° 0 °7 for trading guidelines*

[@alexaskew70]

Would be interesting to see how the market reacts to a period of rising interest rates, which we have had now. At some stage that does suggest a fall. But then you have to factor in real interest rates, which are still negative.

[@chrismclean2989]

An approach might be duality... a bit of both to hedge your bets 👍

[@w.s.d402]

James, you are very pragmatic, so crucial for one to invest in their comfort threshold; I feel you Invest in either strategy as long you can sleep each night without a worry Great Information Sharing

[@JamesShack]

Yes indeed, find what works for you!

[@j4jjj]

I predominantly lump sum invest but am more likely to DCA in a high valuation environment. Like you said its about managing your stress. I would definitely be glued to market if I didnt. Just to add to the conversation, either method did not stop me over tinkering with portfolio during my first year. I've learnt my lesson but it's really important new investors develop a diversified strategy and stick with it for a while.

[@JamesShack]

Yes I think there are several things that ALL new investors DO or THINK about doing that I need to address. Things like trying to trade, holding cash back to try and time the next crash, thinking beating the market should be easy, and all the behavioural biases. Thanks for commenting!

[@thetjt]

@@JamesShack I'm holding 100k back in cash. Wouldn't have been stupid two years ago, and probably not now either. Imo not losing much in a crash/recession is more important than trying to chase full profits. I've invested 100k during past 10 months, and that's quite a big investment anyway, although third of it is at bond ETFs. I will, of course, continue investing as the opprotunities arise if they're good enough. One must be a fool to invest on S&P500 index at current evaluations, even if goes up, imo. Right?

[@jamesbowater1328]

I went for a lump sum investment over DCA-ing to benefit from time in the market. It would be great to hear about the best approach to take a lump sum OUT of the market (say to buy a house). I'm currently down 2% - part of me wants to take the money out in a lump sum to protect what I still have for the house, but part of me wants to DCA out, so that I avoid crystalizing my 2% loss and have a chance to regain some capital.

[@prodavnicayugo]

I’m in the ISA / tax free wrapping camp, with some short term premium bonds parking ‘til the end of the tax year. These overlap as the school fees & family emergency fund in a sort of “snake in tunnel” cash fund that can flex up&down.

[@amechiokonyia820]

Great video.. I have a question, can I open up a vanguard retirement account and also a life savings 100% account at the same time?

[@batukaly]

Fantastic video with scientific backup. I think, however, there are more than 2 options. I'd like you to also introduce a third option - waiting for the market to crash/take a dip and then invest the lump sum. I am currently sitting on some cash I'd like to invest but the Shiller PE ration is close to 40 now. Even though, the sample size is very low in these areas, one would assume that the possibility of lump sum outperforming DCA dimishes. My strategy currently is therefore to wait until the market crashes and invest my lump sum then. What do you think about it? The only problem with that strategy is to define the exact point to invest. Should you invest after a dip of 20%, 30% or even 50%? I guess that depends on how much higher the markets rise.

[@yadfgp]

I'm in the same boat! I have a life changing amount of money on hand I'd love to invest, was thinking of doing some lump sums with about 70% of it, and then maybe buy some more later on down the road. But all this fear and speculation of what 2022 might hold (inflation, I live in the USA, so many people saying we're in a massive stock bubble etc), has me seriously rethinking this strategy and not doing anything. But then what do I do if the market just keeps going up and up for the rest of the year? I might just invest maybe half instead in some safer index funds and not be so greedy with growth funds etc. For now just going to wait and see how the next month or so goes before doing anything.

[@downwind_david]

Maybe you need to watch James' other video... kzbin.info/www/bejne/j4OqYWylqp6kZ6c

[@FlyingFun.]

Good points, I'm investing money from my house sale and debating this , right now feels like it's all overpriced and likely to crash but I dont want to sit on cash either.. I'm putting large ish sums in weekly but wondering if I'm just prolonging the agony and buying more expensive each time.

[@JamesShack]

Hi Nigel, it can be easy to tie yourself in knots when you're 1) Just starting out 2) Investing your life savings. If you do think you'd like some professional help you know where to come! calendly.com/james-shackell/call-with-james-15

[@chris1609]

Thanks James. watching your videos has replaced my Netflix binge, my wife is getting jealous about how much I refer to you at home these days. I currently hold my investments in my company SIPP. I get your point about how valuable time in the markets is, but looking at your chart on the PE Ratio performance as at yodsy today, would you not recommend holding a bit as cash in my SIPP for when the markets do drop, which looks like soon?

[@JamesShack]

Hi Chris, that's great! I think this is actually going to be my video next week I think "Holding onto Cash for the next Stock Market Crash | Genius idea or fool's errand?" sound like a good title? Is this a SIPP of a business you own?

[@chris1609]

@@JamesShack I think that sounds like a good topic to cover. No it's my employer's pension scheme that I contribute to. I work for a company you probably use. We provide human insights (expert networks) and financial content on the global markets/sectors. My colleagues are well versed in the markets but of course all have a different view on whether it is good to hold some cash in a SIPP in the event of a crash.

[@The_Couch_Critic]

Can you create a vlog on LISA and investment options in UK, I'm looking to kick that off for retirement

[@jimosullivan3843]

Hi Great video's I enjoy the content , here's a cheeky question my company pension is invested in Alliance Bernstein 2016-2028 fund , Do you know how I can find out who else has this fund as an option as I wish to move my units owned to a new SIPP . Thankyou in advance for any help Regards Jim

[@johnchin29]

Good balance analysis..but for average small time investor with limited funds its best by dca. I got a monthly drip etf since 2013 even with a drop of 10 to 20 pct I am still up 30pct total basis so no worries or nightmare

[@garethdwright91]

Cheers, Jam-a-lam!

[@JamesShack]

You’re welcome!

[@thewelshdragonwagon]

Timely video by James as I am looking to lump sum 4k in the short term to try and outperform the measly gains offered by NS+I bonds. Hoping to get on the property ladder before the year end so would be open to hearing suggestions on how to try and seek out a moderate return in a short timeframe. Already investing monthly in vanguard, so that's my monthly long term play, just wondering what the best short term plays are?

[@JamesShack]

Hey, did you see this video I did on Short term investing kzbin.info/www/bejne/on68l5-Mr9SeaZI ?

[@thewelshdragonwagon]

@@JamesShack Fantastic, thank you, although I think you re-linked this video. I thik its this one you mean which I will check out 🙊 kzbin.info/www/bejne/oHS4k3WCrdmtg9E

[@JamesShack]

@@thewelshdragonwagon ah yes that’s the one!

[@CrabappleKing]

DCA + war chest full of cash at the ready for when the market dips/crashes :)

[@JamesShack]

Hi Max I’ll be doing some analysts on this cash holding strategy for my video on Sunday

[@Golden_Samurai_]

Well I’ll be honest, I have gone the all in approach lately, Went all in on Crypto, AMC, NVDA, And a cheeky couple of lifestrategy funds. DCA might be more suitable and I guess time will tell on that one for me. Either way, Goodluck to everyone and their own portfolio. Have a great start too the new investing week.

[@JamesShack]

You to Clarkus.

[@leifharmsen]

If I were an advisor I'd generally advise dollar cost averaging - only because I'd avoid wrath and blame in the unlikely event that the stock market flounders. For myself I can see past the time machine illusion and I'd throw it all in and get on with my day.

[@owenrosindell8956]

Hi James. Great Videos and I've recommended your channel to friends and newbe investors. I've just gone (apart from my other investments) for Vanguard Life Strategy 100%, VHVG, VUAG and VWRP 25% each in one go (ACC not DIST) as a "Punt" but also monthly continuously adding the same pick. I know there's no Bonds here. I'm going for growth - Is this a is good strategy or can you see any obvious issues ?

[@JamesShack]

The only thing I would say is that that is quite complicated. Have you watched this: kzbin.info/www/bejne/aIe2o6qih8qeZ5Y ?

[@CovertDonut]

I would say invest a lump sum (if your risk tolerance can cope with it). I gradually invested a fair bit of my savings. I dripped that in over about a month, but that was more to do with getting used to reducing savings and putting it in my S&S ISA for the foreseeable. It just takes some getting used to as a person relatively new to investing.

[@JamesShack]

Yes it does. But after a year or two you won't even think about it!

[@CovertDonut]

PS Great video James and keep up the good work! Get subscribing guys. James is offering invaluable advice for our financial future, without us paying him a single pence! We need to support this channel.

[@ieornl]

Watching this because I'm a new investor and did lump sum purchase of several stocks last month, now I'm kinda nervous after seeing my holdings value drop... not gonna sell but I just want the assurance that what I did was alright in the long run and to remind myself not to sell low.

[@Stevenc1984]

Interesting video! I'd probably invest regularly over a much shorter period, say 3 months. Setting out a plan say 1/12 each week (given no dealing fees) 24 months seems far too long, do you have the comparison for 3 or 6 months?

[@JamesShack]

I don't but it will be somewhere between the two. 6 months will have less underperformance than 24 months and 3 months will have less underperformance than 6.

[@Stevenc1984]

@@JamesShack Thanks for the response!

[@jamesc328]

I am happy with Lump Sum, in the last three months I moved everything to Vanguard, and increased by about 30% via Lump Sum on top. I do a monthly investment into my pension, but will see how much I can max it out by at the end of the year and will do that, so top it up via Lump Sum. I do not know if you have done a video about Pensions, but I think it would be a good subject, once I did some research, I was surprised to find out how much you can invest each year.

[@JamesShack]

Yes pensions are a strong tool! I did a few Shorts on pensions but I do need to cover them off properly.

[@ModestMillennial]

@Jamie: I think you are doing great, keep doing what you are doing 🙂

[@adm58]

I'm dripping in with most of my capital in money market funds receiving interest as I do so. Part of the reason for this is the high valuations at the moment (Jan 24). If there were a sudden drop, though, I'm sure I would put more in, the lower the more. It's just a security blanket thing of knowing I'd have some upside waiting as the markets will ultimately regain & then surpass their present highs.

[@indeed596]

Me too. Couldn't stomach dropping my lump sum right now.

[@benrichardson9526]

I dca every month as a rule, however i have other bits of savings that build up over time and if theres a significant drop i then use that to buy in in chunks to add to my portfolio

[@JamesShack]

So you put some into investments some into savings each month?

[@benrichardson9526]

@@JamesShack yeah and then if theres a big dip i use my savings to invest a lump sum

[@Davidshatsky]

Hi , great vid!. For what time period of investment are these stats based on?

[@JamesShack]

24mths for the dollar cost average

[@Davidshatsky]

@@JamesShack I mean for how long do the funds stay in invested after the 24 months ? Thanks!

[@carltontv4453]

Hi James, if you have 100k lump can you invest into a Vanguard life strategy fund with out get tax as it is above 20k allowance?

[@HowardAbraham]

During the pandemic I was able to take a one-time penalty-free disbursement of $100K out of my 403B. I moved that money into an IRA as a lump sum. DCA wasn’t really an option under that scenario and it never even occurred to me. Other than that, I haven’t had many lump sums fall from the sky and my day-to-day investing has always been DCA as automatic contributions.

[@djfearross4144]

I tried dollar cost averaging and have made over 14% return. Really happy with that. Not so happy that I now have more than half my money sitting in cash that will be going in at higher rate.

[@arunmenon6513]

Hi James, another Great video based on facts and quite scientific which helps a layperson like myself understand the technicalities of how the financial markets and how investments perform. I do however from my experience still prefer to do a phased investment as opposed to a lumpsum investment and the reason is my most recent experience where I invested in JP Morgan emerging markets for example with Hargreeves Lansdown and the investment was for a small sum based on what I was tracking over a period of time where the fund was significantly outperforming. I then invested a small sum in February’21 and between February and now the fund is still around just short of 10% down. so if I had invested a larger sum than what I did I would be significantly down. whilst the loss has recovered the recovery has been marginal (< 0.25%) between February and now. It just goes to show that lumpsum investing can be quite a risky proposition across a range of funds but I do appreciate all the evidence that you provided and it’s really useful. 🙏

[@jennyskerry344]

*Thanks for your review feel free to contact my personal broker on WhatsApp ...+1° 3° 8° 6° 3° 6° 1° 3° 2° 0 °7 for trading guidelines*

[@CrappyProducts]

Sure but if you invest for example in a Lifestrategy the risk of going down is exceptionally low

[@Alan7997]

I'm currently investing 30% of my weekly disposable income into a stocks and shares ISA and holding back 70% as cash. If and when the markets crash, I'll be "all in" on my weekly investing and phasing in the cash store as well in instalments as the crash may take months to hit rock bottom.

[@jennyskerry344]

*Thanks for your review feel free to contact my personal broker on WhatsApp ...+1° 3° 8° 6° 3° 6° 1° 3° 2° 0 °7 for trading guidelines*

[@zakariasunbol4645]

I think the perfect answer here depends on time , if your plan is to invest for more than 10 years going all in is a perfect way , because even if you face a crisis and buy all of the assets at a high price eventually you will make it positive, on the other hand, if it's less than 5 years cost averaging is the perfect decision

[@Christof77]

So I've been investing only for 4 months however I invested a lump sum at the beginning and now top it up every month. I didn't put all my savings into the lump sum at the beginning as I'm currently saving for a new home and therefore have invested what I can with the long term in mind (10 years +)

[@JamesShack]

Nice Chris, stick with your plan m.

[@joeGuizan]

The scenario in India is a bit different. By indices, India is doing nearly double that of the US per annum. So after selecting a good company, lump sump does way better than DCA (SIP) in India.

[@basmatibam]

Hi James I reached 40% of profits with a mixed etf portfolio, and sp500 reached 4300 and markets are stretched. I am up 20k out of 55k of investment. When do we take profits from the table? I can't find any answer in your videos. What about selling everything tomorrow, and restart dca 8k for the next 6 months?

[@n.8899]

I started investing inbstock market and crypto at the end of april and i m in the third month now. I have so far allocated only 35-40% of my funds as several companies are quite overpriced and slowly buying into dips with the cash

[@lekudos]

Hybrid approach: Bigger deposits when the market is down Smaller deposits when the market is peaking.

[@JamesShack]

Let me know when the market is peaking will ya! And i'll do the same!

[@lekudos]

@@JamesShack I knew the dangers of that comment when I made it! 😆 But I think it’s not that confusing when one finds himself in an overbought market to ease off the pedal somewhat. Tesla’s P/E ratios from a few months back is a pretty good example of this.

[@JamesShack]

@@lekudos Haha 😂. There’s some flashing indicators right now but at the same time the stock market is forward looking, sometimes very forward looking, and it may take a fee years for companies to “grow into” their valuations. Yes potentially lower returns that we’ve seen in the past but not necessarily negative. Lots of ways this could play out! As long as you’re not going to the extremes (100% cash 100% or leveraged ETFs to try andmake up for the lower return) then it’s fine.

[@bad_writer]

The market is peaking most of the time, so you're going to do smaller deposits most of the time? Sounds like a solid strategy

[@lekudos]

@@bad_writer if the market was always peaking, there would be no need for KZbin channels like this! We wouldn’t need any advice. I think you mean something else....?! 👀

[@UIMcocodog]

Waaait wat. So the shiller pe ratio is why people get called a shill when they seem to be low key advertising something?

[@DaveBFC]

I've just transferred 2 pensions into a Vanguard SIPP and is held in cash. I will drip feed over the next 2 years until fully invested or will lump in should the markets crash! I plan to start withdrawing in 2 years so can't risk lumping in now whilst the markets are overvalued!

[@JamesShack]

Hi Brent, we’re they previously invested before you transferred them ?

[@DaveBFC]

@@JamesShack They were James but with the markets as they are I thought I'd take the cautious approach!

[@shane6860]

Interesting tho. DCA has most definitely been the better choice in the last 2 years on the S&P 500. Hindsight 20/20.

[@johntownsend3944]

Would the lump sum still be the best move now with the market falling? I doubt it.

[@redhouseclose]

I put 20k in my Vanguard ISA this year after 2 years of DCA after realising that the market went up during more more months than it fell in the previous 2 years(small sample size).I also noticed that the gains far outstripped the losses. Thus far(9 months in) it looks like a good decision. I may put 10k in April and 10k in October after noticing a pattern there but again a small sample size.Will definitely do that if Jan-March repeat the last 2 years performance.

[@JamesShack]

Hi Ken, great to hear you've been investing! Although I would be wary of divining any patterns only from price movements. If there really were patterns there, others would already have recognised them and capitalised on them to the extent that there is no opportunity there for anyone else. And by others I mean high frequency traders and hedge funds that take small profits on tiny price indiscrepancies, that would not be worth it for you, but they do it over such vast volumes of trades that make it worth it.

[@redhouseclose]

@@JamesShack Hi James Thanks for reply. Yes I realise your points but I need to invest the 20k anyway and I reckon I prefer lump sum to PCA leaving cash in Marcus earning 0.6 % Enjoy your content as it mainly reinforces what I’ve been doing over the years.